Property Damage Insurance Attorney Serving Port St. LucieEUO’s and Property Insurance Policies

The requirement of an insured to submit to an examination under oath, or EUO, is often found in a residential property insurance policy. In short, the purpose of an EUO provision in an insurance policy is to obtain information from the insured so that the insurer can assess its obligations under the policy, and also protect itself from potential false claims.

EUO’s and Depositions

The format of an EUO is similar to that of a civil deposition. In both instances, the subject, for instance, must take questions from the insurer, or the insurer’s representative, in a rather formal setting in which the subject is testifying under oath. Conceptually, however, an EUO and deposition are different things. First, an EUO is based on the policy contract. That is, the insurer’s right to examine the insured in an EUO is contractual in nature. In contrast, a litigant’s right to depose a party or witness in a deposition is based on the rules of civil procedure. Secondly, EUO’s are normally taken before civil litigation is commenced; and they are part of the insurer’s claims investigation process. Depositions, by their nature, are taken only after litigation has commenced.

Because an EUO and deposition are distinctly, separate examinations, it is quite conceivable that an insured may have to submit to an EUO; and then, if there is litigation later on, he or she could be subjected to a deposition with regard to the same claim.

What happens if an insured fails to attend an EUO?

Generally speaking, it is not a good idea for an insured to ignore the insurance company’s request to conduct an EUO. If an insured patently refuses to attend an EUO, or if he or she does not make any good-faith effort to comply, such failure could potentially lead to the forfeiture of the insured’s rights under the policy. The courts in Florida have sometimes reached different results where an insured has failed to comply with a policy’s EUO provision. In Goldman v. State Farm Fire General Insurance Co., 660 So.2d 300 (Fla. 4 th DCA 1995), the insureds’ home was burglarized. As part of its investigation of the claim the insurance company demanded in writing that the insureds submit to an EUO. Ultimately, the insureds filed suit but did not submit to an EUO at the insurance company’s request. The trial court granted the insurance company’s motion for summary judgment against the insureds based on their failure to attend the EUO’s.

The appellate court (Fourth DCA) agreed with the trial court’s ruling. The Court stated that a policy which requires the insured to attend an EUO is a condition precedent to filing suit against the insurance company. The Goldman Court, in affirming summary judgment in favor of the insurance carrier, declined to permit the insureds to comply with the policy’s EUO provision some two years after the suit had been filed.

However, in Southgate Gardens Condominium Assoc., Inc. v. Aspen Specialty Ins. Co., 622 F.Supp.2d 1332 (S.D. Fla. 2008), a case out of the Southern District of Florida, the court adopted a more lenient approach than did the court in Goldman. In Southgate, the insured, a condominium association, advised the insurance carrier it had certain supplemental claims for property damage that it was going to pursue. As part of its investigation the carrier requested to take EUO’s from representatives of the insured. The EUO’s were initially scheduled, but then they were later cancelled. The insured eventually filed suit. During the course of the litigation, the insured offered to submit to the EUO’s, but the carrier rejected this offer.

The court in Southgate reiterated the principle that the requirement for an insured to submit to an EUO is a condition precedent to filing suit. However, the court chose not to dismiss the case with prejudice. Significantly, the court pointed to two important sets of facts. First, only nine months had elapsed since the carrier requested the insured to submit to the EUO’s. Secondly, the court noted that the carrier had waited two years to request the EUO’s from the insured in the first instance. Accordingly, the court dismissed the case without prejudice to permit the insureds to belatedly comply with the policy’s EUO provision.

In Nunez v. Universal Property Casual Insurance Co., 325 So.3d 267 (Fla. 3d DCA 2021), the insured completely failed to attend an EUO. The court’s analysis in that case followed a two- part approach in addressing whether the insured had forfeited her rights to coverage under the insurance policy. Sometime after her claim for damage was filed, Ms. Nunez, the insured, was requested by the carrier to submit to an examination under oath. Despite multiple requests from the carrier to attend an EUO, Nunez failed to comply. Nunez eventually filed suit against the carrier without having complied with her EUO obligation.

The appellate court (3rd DCA) agreed with the trial court’s ruling that Nunez had breached the insurance contract when she failed to attend the requested EUO. It also agreed with the trial judge’s decision to order a new trial on whether Nunez’ breach of the contract had prejudiced the insurer. In other words, the court in Nunez followed a two-part analysis in this case. That is, the court stated that a finding of prejudice against the insurance company must be made if the insured is found to have breached a post-loss obligation in the policy.

If you are an insured in Florida and have been requested by your carrier to attend an examination under oath feel free to call our attorney for legal assistance.

Filed under: Florida Business

Like this post? Subscribe to my RSS feed and get loads more!